Page 4 - LatAmOil Week 10 2021

LatAmOil COMMENTARY LatAmOil

Bolsonaro is looking to avoid a repeat of the 2018 truckers’ strike (Photo: ABr)

A clash brewing in Brazil?

Discontent within Petrobras’ ranks may complicate Bolsonaro’s efforts to keep
diesel prices down ahead of the next election, which is likely to be hotly contested

SINCE the beginning of the year, there have his administration more leverage over fuel pric-
been signs that Petrobras, the national oil com- ing. Specifically, he has been trying to change the
WHAT: pany (NOC) of Brazil, was headed for a period fuel tax regime and has declared his desire to see
A former president may of turmoil. Most of these signs have been related domestic fuel prices, which were deregulated
have the opportunity to to Brazilian President Jair Bolsonaro’s bid to nearly 20 years ago, capped.
challenge Bolsonaro in address complaints in the trucking industry Additionally, he has sought to punish the
next year’s election. over rising fuel prices. main opponent of his plans for changing the fuel
In recent years, truckers have been among pricing regime. Last month, he announced that
WHY: Bolsonaro’s most loyal supporters. However, Roberto Castello Branco, the CEO of Petrobras,
The incumbent might their enthusiasm has waned as prices for petro- would not be asked to remain in his post once
change course on issues leum products – especially diesel, the main fuel his current term expires on March 20. Instead,
such as fuel pricing to for medium- and heavy-duty trucks – have fol- he appointed Joaquim Luna e Silva, a reserve
consolidate and expand lowed world crude oil prices upward. army general and former defence minister, to
his support so that he can
remain in office. They have also threatened to stage a strike if the position.
diesel prices, which have been hiked multiple Luna, who has no experience in the oil and
WHAT NEXT: times since the beginning of January, do not gas industry, has indicated that he will not
Bolsonaro’s pick for come down. oppose the president on this front. However,
Petrobras is not likely to Petrobras’ outgoing executive team appears
block measures such as Bolsonaro’s new approach to have delivered a parting shot; the company
fuel price caps, but the The president, who has no desire for a repeat of raised gasoline and diesel prices on March 2 and
company may look for the disruptions caused by a truckers’ strike in then made another increase on March 9.
ways to resist this shift. 2018, has responded by looking for ways to give Bolsonaro’s decision was hardly surprising.

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